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Question

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Ken

    I am running across with customers more and more opposition to signing our agreements because of the indemnity clause in our agreement.  Our customers want us to sign their indemnity agreement which voids our indemnity clause.  Do you have any recommendations about handling this?  Do you have any simple language explaining why it is important for our customers to sign our agreement and why we cannot sign their indemnity agreement?

    Hope to hear from soon

Thanks

Warren Davis

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Answer

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    Good question for the first of the year because this is likely to continue to be an open sore for the industry with no easy fix.  Obviously when your contract requires the subscriber to indemnity you, and the subscriber's form requires you to indemnify the subscriber, there is irreconcilable differences.  You may not recall but your company had a lawsuit where both your Standard Form Contract was executed and the subscriber's form agreement was executed.  In fact several of your contracts were signed over a period of time.  We were able to get the case dismissed because we showed that your contract, with your indemnity clause, was signed last and governed the relationship.  That last signed contract superseded the subscriber's contract in which you agreed to indemnify the subscriber.  

    Some subscribers are going to insist on their contracts being signed and you're going to sign on so you can get the work.  You need to make sure that you're insured for your "contractual indemnity".  Get an endorsement on your policy or get a letter from your broker that your policy covers you for Contractual Indemnity.  If your broker says you can't get it or doesn't "recommend" it or, worse, "never heard of such a thing", get rid of your broker and call one of the brokers listed in The Alarm Exchange.  

    What can you do to convince or encourage your subscribers to sign your contract.  I know that you use the Standard Form Commercial All in One primarily.  That is a good start because the contract actually covers all of your fire alarm services and clearly appears to be an industry standard contract form.  A standard form should be more acceptable to your subscribers.  At least they won't think you came up with all the terms and conditions just to screw them.  [right, you screw all of them -- I didn't say that !!].  

    You should explain to your subscriber that you need your Standard Contract signed because it contains essential terms that are not only customary in the industry, but required by your insurance carrier and AHJ.  The form that your subscriber is going to present you with is a generic form more suitable for a janitorial service or some other business - definitely not a fire alarm company that is exposed to immense liability far beyond what may be justified based on what is being charged for the service.  

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IT'S NEW YEARS DAY AND TO EVERYONE TAKING THE TIME TO OPEN AND READ TODAY'S ARTICLE -

HAPPY, HEALTHY AND PROSPEROUS NEW YEAR TO ALL.


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Date and time:  January 14, 2014  12 noon  EST    

Register here:  
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Title:  Pitfalls for New and Emerging Businesses

 

Topic:   issues to be covered include consequences of incomplete/no/poor documentation, mishandling of employee leaves, problems arising from the use of technology, protection of employer’s interests by employment contracts and how to handle severance pay.  This is a broad ranging webinar addressing the areas in which employers, by failing to create a proper structure, set themselves up for more costly and problematic consequences.

 

Presented by Judge Ruth Kraft, Chair of the Employment and Labor Department at Kirschenbaum & Kirschenbaum PC

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